1. Microsoft Dynamics® AX 2012
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Warehouse Management in Microsoft Dynamics® AX 2012
Microsoft Dynamics® AX 2012
Warehouse Management

2. Warehouse Management in Microsoft Dynamics® AX 2012
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Content
Warehouse Management in Microsoft Dynamics® AX 2012
Overview​
Product Information Management​
Types of transaction
Inventory Journal​
Quality Management

3. Warehouse Management in Microsoft Dynamics® AX 2012
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Overview
Warehouse Management in Microsoft Dynamics® AX 2012
Inventory and Inventory Management concept
General Warehouse Management Concepts
Warehouse Management Definitions
Quality Management
Inventory and Warehouse Management Processes
Integration with Other Modules in Microsoft Dynamics AX 2012

4. Warehouse Management in Microsoft Dynamics® AX 2012
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Product
Warehouse Management in Microsoft Dynamics® AX 2012
Products can be items or services, and products that are tracked in the warehouse become inventory.

5. Warehouse Management in Microsoft Dynamics® AX 2012
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Inventory
Warehouse Management in Microsoft Dynamics® AX 2012
Inventory is the material and supplies a business carries either for sale or to provide input in the production process.
Raw materials and supplies
Products in production
Sub-assemblies
Finished products ready for sale

6. Warehouse Management in Microsoft Dynamics® AX 2012
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Inventory Management
Warehouse Management in Microsoft Dynamics® AX 2012
Inventory management is planning and controlling inventory from the raw material stage to the customer. Companies must consider inventory at every planning level.
The most important products to keep in inventory
The control of products through a company
The quantity of inventory to be ordered
The timing of when a product should be ordered

7. Warehouse Management Key Concepts
Warehouse Management in Microsoft Dynamics® AX 2012
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Warehouse Management Key Concepts
Warehouse management is the administration and management of item flow and inventory in a company’s warehouses and storage facilities . It provides insight into your inventory and the tools to help increase customer satisfaction and reduce costs.
Optimize Your Warehouse Layout
Increase Your Warehouse Efficiency
Improve Visibility into your Supply Chain
Complete Inventory Overview
Scenario
Explain the Key concepts using this scenario
The Contoso company has decided to implement Microsoft Dynamics AX 2012 Warehouse management. Warehouse management will provide the following benefits:
Allow the company to have greater flexibility in the warehouse as the business needs change. For example, the company needs to be able to store various food items at different temperatures in the warehouse.
Bring the company greater efficiency in the warehouse through greater speed in picking and storing of items.
Improve traceability of items throughout the supply chain process.
As a result of Warehouse management, the company expects reduced costs and increased customer satisfaction.

8. Warehouse Management Definitions
Warehouse Management in Microsoft Dynamics® AX 2012
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Warehouse Management Definitions
Sites
Warehouses
Location
Pallet ID
Batch and Serial Numbers
Refer to Chapter 1: Overview – Definitions for content

9. Warehouse Management Definitions
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Warehouse Management Definitions
Definitions
Name
Site
An area of ground on which a building or group of buildings is constructed.
Warehouse
Storage location, such as a building.
Location
Detailed item storage location, such as aisle-rack-shelf-bin. Typically, use this dimension when you operate with Warehouse management.
Pallet ID
ID for a group of products on the same pallet. Only used when operating with Warehouse management.

10. Warehouse Management Definitions
Warehouse Management in Microsoft Dynamics® AX 2012
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Warehouse Management Definitions
Sites
Warehouses
Refer to Chapter 1: Overview – Definitions for content

11. Warehouse Management in Microsoft Dynamics® AX 2012
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Location Structure

12. Warehouse Management in Microsoft Dynamics® AX 2012
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Location Structure

13. Warehouse Management Definitions
Warehouse Management in Microsoft Dynamics® AX 2012
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Warehouse Management Definitions
Pallet
Batch and serial
Refer to Chapter 1: Overview – Definitions for content

14. Warehouse Management in Microsoft Dynamics® AX 2012
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Quality Management
Quality management makes sure that all products are of a constant quality by enforcing strict guidelines to controlling the product and using routine checks and test.
Scenario
Explain the Key concepts using this scenario
The Contoso company has decided to implement Microsoft Dynamics AX 2012 Warehouse management. Warehouse management will provide the following benefits:
Allow the company to have greater flexibility in the warehouse as the business needs change. For example, the company needs to be able to store various food items at different temperatures in the warehouse.
Bring the company greater efficiency in the warehouse through greater speed in picking and storing of items.
Improve traceability of items throughout the supply chain process.
As a result of Warehouse management, the company expects reduced costs and increased customer satisfaction.

15. Inventory and Warehouse Management Processes
Warehouse Management in Microsoft Dynamics® AX 2012
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Inventory and Warehouse Management Processes

16. Integration with Other Modules
Warehouse Management in Microsoft Dynamics® AX 2012
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Integration with Other Modules
Warehouse management is integrated with the following modules:
Accounts payable module
Accounts receivable module
Inventory management module
Master planning module

17. Product Information Management
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Product Information Management
Core master data in inventory management are product records of inventoried items.
Inventory management controls stock per item number.

18. Product Information Management
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Product Information Management
The objectives are:
Describe the concept of products, product masters and their variants
Describe production creation process
Describe the variant configuration technology types
Discuss inventory dimension groups
Discuss how to finalize a released product

19. Product Terms and Concepts
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Product Terms and Concepts
Term
Definition
Product
A product is a uniquely identifiable product. It serves as a core product that does not vary and therefore no product dimensions can be associated with the definition.
Product Master
A standard or functional product representation that is the basis for configuring product variants. The variations are configured by selecting a configuration technology. This can be either a set of predefined product dimensions or by using product configurations in sales scenarios.
Product Variant
A product variant is the configuration of a product master. Based on the choice of the configuration technology, the variant can be either predefined by using the product dimensions of its master or configured by using a configurator tool.

20. Product Creation Process
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Product Creation Process
Use the following process to create a product:
Create and define the product.
Release to legal entities.
Define legal entity specific data.
Use the product.

21. Create and define the product
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Create and define the product

22. Demonstration: Create a Product Master
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Demonstration: Create a Product Master
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Your instructor will demonstrate how to create a new product.
In this demonstration, you will show how to assign a category and enter product attribute values
Duration: 5 minutes
Demonstration Steps :
Open Product information management > Product master list page
Select Item in the Product type field.
Type a unique Product number, if the number sequence is not set up to as auto.
Optionally, type a description into the Product name field.
Optionally, type a search description into the Search name field.
Select a group that has color enabled from the Product dimension group field.
Make sure the Configuration technology field is set to Predefined variant.
Click OK.
NOTE: <add extra note, if applicable>
5 min

23. Create and define the product
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Create and define the product

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Product Types
Product type:
Item
Service
Product subtype
Products
Identifiable products
No associated variations
Product masters
Templates or models for variants
Predefined or manually created in sales scenarios
Associated with one or more product dimensions

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Product Dimensions
Microsoft Dynamics AX 2012 offers three product dimensions:
Size
Color
Configuration

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Configuration Types
Configuration Technology
Definition
Predefined variant
This type enables the product to be modeled based on the product dimensions, color, configuration, and size.
Dimension-based configuration
A configuration technology that is used to create product variants by selecting values for product dimensions.
Constraint-based configuration
This type enables product to be used in the Product Configurator.

27. Create and define the product
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Create and define the product

28. Finalizing Released Products
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Finalizing Released Products
A product must be finalized in each legal entity where it was released. The following fields must be set up, but can be entered manually or by using a template:

29. Inventory Dimension Groups
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Inventory Dimension Groups
Inventory dimensions are used to define the physical characteristics of inventory items.
They control how items are stored and drawn from inventory and enable inventory to be managed on a detailed level.
Inventory dimensions are split into:
Storage dimensions
Tracking dimensions.

30. Storage Dimension Groups
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Storage Dimension Groups
Site
Warehouse
Location
Pallet ID

31. Tracking Dimension Groups
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Tracking Dimension Groups
Serial and batch numbers are inventory tracking dimensions, and can be allocated to products only when the product’s tracking dimension group allows for it.
Serial numbers are assigned to individual items, where batch numbers are assigned to a set of items.

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Item Groups
Item groups serve three main purposes:
Defining sets of ledger accounts for accounting entries, of a collection of products that are classified in the item group.
Using item groups to report detailed financial information and queries.
Creating other reports that are related to products.

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Item Model Groups
Item model groups determine the following stock and inventory policy:
Whether the product is stocked or not stocked.
The cost flow assumption and cost measurement method for valuing inventory of stocked products.
If physical and financial negative inventory is permitted.
If inventory transactions should be posted to the General Ledger.
The workflow that is used when you send or receive items.
The reservation rules.

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Item Model Groups
The Setup FastTab of the Item model groups form has six field groups.
Inventory policy
Negative inventory
Warehouse management
Ledger integration
Physical update
Reservation

35. <add title of course>
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Item Model Groups

36. Released Products Details Form
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Released Products Details Form
Image: AX2012_ENUS_SCF_02_027.png

37. Inventory Transactions
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Inventory Transactions
The objectives are:
Define types of transaction
Describe and explain the transaction process
Discuss the transaction integration
Discussion the transaction and inventory inquiry

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Types of Transactions
In order to change the quantity on hand, you need to post an item transaction. Depending on the direction of the item transactions, you may distinguish three different types:
Item receipts – Inward transactions
Item issues – Outward transactions
Inventory transfers

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Item receipt
Item receipts increase the quantity on hand. They include:
Product receipts in purchasing
Customer returns in sales
Reporting as finished in production
Positive inventory counting adjustments
Manual journals in inventory.

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Transaction Process
Procurement
INVENTORY 1
Product Receipt
Agreement
P/O
Release
Prequisition 2
Item Arrival
Quotation
RFQ
On-hand

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Item Issue
Item issues include:
Vendor returns in purchasing
Packing slips in sales
Picking lists in production
Negative inventory counting adjustments
Manual journals in inventory.

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Inventory transfer
Inventory transfers include:
Transfer orders: support the transfer of items form one warehouse to another, providing the option to post and print picking lists.
Transfer journals: not only available for transfers from one warehouse to another, but also for changing other dimension values (e.g. adjusting a serial number).

43. Transaction Integration
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Transaction Integration
Most of the inventory transactions do not originate in the inventory and warehouse management module, but derive from other parts of Dynamics AX.
=> Have to enter all data required for the inventory transaction (like warehouse, quantity and price) at the transaction origin in the other module .

44. Transaction and Inventory Inquiry
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Transaction and Inventory Inquiry
Transactions Form

45. Transaction and Inventory Inquiry
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Transaction and Inventory Inquiry
In order to see the current quantity on hand of an item, you may click the button View/On-hand hand inventory on the action pane tab Manage inventory of the released product form.

46. Transaction and Inventory Inquiry
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Transaction and Inventory Inquiry
The physical inventory is the total of transactions, which show following status:
Posted quantity – Invoiced quantity of purchasing deducting sales
Received – Product receipt in purchasing, adds to posted quantity
Deducted – Packing slip in sales, deducts from posted quantity
Registered – Registration and item arrival, adds to posted quantity
Picked – Picking in sales, deducts from posted quantity

47. <add title of course>
<add course number>
<add title of course>
Watching video
In this demonstration, you will show how to assign a category and enter product attribute values
Duration: 5 minutes
Demonstration Steps :
Open Product information management > Product master list page
Select Item in the Product type field.
Type a unique Product number, if the number sequence is not set up to as auto.
Optionally, type a description into the Product name field.
Optionally, type a search description into the Search name field.
Select a group that has color enabled from the Product dimension group field.
Make sure the Configuration technology field is set to Predefined variant.
Click OK.
NOTE: <add extra note, if applicable>
5 min

48. <add title of course>
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Inventory Journals
The objectives are:
Create and process inventory adjustment and movement inventory journals
Create and process a transfer journal
Create and process a bill of material (BOM) journal
Explain counting journals

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Inventory Journals
Inventory journals are used for posting physical inventory transactions including:
Posting issues and receipts
Inventory movements
Creating bills of material
Reconciliation of physical inventory.

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Journal structure
Inventory adjustment
Movement
Transfer
Bills of materials
Item arrival
Production input
Counting
Tag counting

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Movement Journal
The Movement journal can be used to:
Bring in opening inventory balances during system setup, and offset these adjustments to specific ledger accounts.
Charge an item to a different department, for example, from Prototyping to Engineering.
Take items out of inventory to take to a sales show. The inventory value must be reduced and should be considered as an expense from the Sales Department.

52. Inventory Adjustment Journal
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Inventory Adjustment Journal
Use the Inventory adjustment form to enter:
Loss – where items are picked or removed from inventory
Gain – where they are received in inventory
When you post this kind of journal, an inventory receipt or issue is posted, the inventory level and value are changed, and ledger transactions are generated.

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Transfer Journal
Transfer journals are used to move or transfer an item in an Inventory dimension.
Each transfer minimally identifies an item, quantity, and the old and new stocking locations.
Inventory transfers reflect the immediate movement of material, without a requirement for tracking in transit inventory

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BOM Journal
Bill of materials journals, provide the possibility to post a receipt of a finished items while consuming the components at the same time. Entering a negative quantity, you may as well post disassembling of a finished item.

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Item arrival journal
Item arrival journals provide the option to post item receipts related to purchase orders or customer returns

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Counting Journal
Calculate the current on-hand inventory level that is recorded for a group of items, and then post the actual physical count to make the adjustments necessary to reconcile their differences.
Each warehouse item has its own counting group, warehouse management, and product dimension setup.

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Tag Counting Details
The following information should be registered on the tag:
Tag number
Item number
Item quantity
Each tag must have one of three status values:
Used – item number counted for this tag
Voided – item number voided for this tag
Missing – item number missing for this tag

58. <add title of course>
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Quality Management
The objectives are:
Describe the function of the quality management
Describe the quality management process
Explain how to create and use quality orders

59. <add title of course>
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Quality Management
Quality management functionality offers full integration for managing quality processes and non conformances. It helps manage, track, and handle quality processes and issues throughout a company.
The quality management functionality consists of two primary components:
Quality Control
Quality Management

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Quality Control
The quality control component is used to set up and manage the quality testing requirements for a company.
Specification of the test instruments that are used to perform the tests
Identification of test locations where the tests are held
Definition of the test specifications that determine whether test items meet the quality standards
Creation of the quality order

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Quality control
Quality control can also be used to record the test results that are associated with a quality order and create a Certificate of Analysis (C.O.A.) that will be linked to the quality order information.

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Quality Management
The quality management component is used to manage non conforming products and items, such as damaged or defective goods, and to track and resolve customer or vendor problems, such as product complaints or performance issues.
Quality management can also be used to tag non conforming items for quarantine.

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Quality Management
In Dynamics AX, there are two options to exclude quantities of an item from available stock:
Quarantine Management
Inventory Blocking

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Inventory blocking
Inventory blocking generates a temporary transaction, manually or automatically for quality inspection.

65. Inventory Blocking Form
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Inventory Blocking Form
Image: AX2012_ENUS_SCF_08_007.png

66. Quarantine Management
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Quarantine Management
Quarantine management is based on quarantine orders, which post a transfer to a quarantine warehouse. You may transfer stock to quarantine either automatically with every item receipt, or manually when required.

67. Quarantine Management
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Quarantine Management 1
Direct
Main Warehouse
Inbound
(Automatic)
(Manual)
Quarantine Warehouse
Report as Finish 2
Quarantine Order
Quality control

68. Quarantine Management
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Quarantine Management
Quarantine management helps a company control incoming items and prevents items from entering a production environment or from being sold while they are waiting to be quality control or are in a controlled status.

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Quality Management
If an item is set up for an automatic quarantine, the quarantine order can be created at the following points in time.

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Quality Management

71. <add title of course>
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Quality Order
A Quality order defines a set of one or more tests that must be performed for an item and a test quantity of its related order (such as a purchase, sales, or production order) or a test quantity of its inventory.

72. <add title of course>
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Quality Order
For each test, the quality order defines:
The quality specifications
An Acceptable Quality Level (AQL)
The applicable test instrument
The documents that describe the test ….

73. <add title of course>
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Quality Order
A test can be:
Quantitative (with specifications and test results expressed as values for a specified unit of measure)
Qualitative (with specifications and test results expressed as user-defined outcomes that reflect pass or fail).

74. <add title of course>
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Quality Management
Item Sampling
Fixed Quantity
Percentage…
Batch
TEST
(Destructive test?) OK
Not OK
Main WH
Returned
…..

75. <add title of course>
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Validation Process
After reporting the test results for each test in a quality order, start a validation process that assigns a pass or fail status (based on meeting the overall AQL) and closes the quality order.

76. Demonstration: Create a Quality order
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Demonstration: Create a Quality order
<add title of course>
Your instructor will demonstrate how to create a Quality order.
In this demonstration, you will show how to assign a category and enter product attribute values
Duration: 5 minutes
Demonstration Steps :
Open Product information management > Product master list page
Select Item in the Product type field.
Type a unique Product number, if the number sequence is not set up to as auto.
Optionally, type a description into the Product name field.
Optionally, type a search description into the Search name field.
Select a group that has color enabled from the Product dimension group field.
Make sure the Configuration technology field is set to Predefined variant.
Click OK.
NOTE: <add extra note, if applicable>
5 min